Mol says maintenance means no base oil term supply

Hungarian refiner Mol has notified its term customers that it will not supply Group I base oils from its 160,000 b/d Szazhalombatta refinery in May.

Technical problems including an electrical fault and a steam pipeline failure affected production at its 198,000 t/yr Group I unit, and prevented sufficient stockpiling ahead of a scheduled maintenance shutdown that starts today. Mol had already curbed spot offers to domestic customers in the lead up to the maintenance. Wax spot offers will be more limited in May.

Molss customers will turn to other suppliers to cover their May requirements until production resumes at the beginning of June. Mol will prioritise term customer demand when supply becomes available.

Spot availability in the region is limited as two eastern European refineries, PKN Orlen and Lotos, are in maintenance shutdowns. Works will probably complete in the first week of May, but it could take up to three weeks for production to ramp up, for stock replenishment and to prioritise regular customers before spot supplied would be widely offered.

Belarus' state-owned Naftan's refinery has restarted after a maintenance shutdown in April but it does not plan to offer shipments until June.

Maintenance is also affecting availability in the Mediterranean region, limiting alternative supply options.

Italy's Eni has been stockpiling in anticipation of its scheduled turnaround in mid-May, and Portugal's Galp has been stockpiling as it prepares to permanently close its base oil unit at the end of April. That closure has put pressure on other regional refineries to cover Galp's regular domestic and export customers.

Sustained low supply and competition has supported European Group I prices to historic highs. Domestic bright stock prices have quadrupled to $2,280/t this week from $525/t at the end of May 2020.

The base oil unit at Szazhalombatta produces Group I base oil grades — SN 85, SN 100, SN150, SN 200, SN 350, SN 500, SN 600, SN 650 and bright stock. It produces several grades of paraffin wax and micro-crystalline wax.

By Clara Toellner